HEADLINES [click on headline to view story]:

Two US companies eye up Thai aerospace industry

Rising food prices push inflation rate higher

Pirate operators cutting into UBC’s profits

Private sector must spur national economic growth

Two US companies eye up Thai aerospace industry

Industry Minister Somsak Thepsuthin announced that two United States aerospace companies are considering the possibility of investing in projects to transform Thailand into a regional aviation hub.

Speaking after a recent joint meeting with the Air Force and Finance Ministry on plans to turn Thailand into a regional aviation center, the minister said that a partnership company would be established to oversee the transformation, with registered capital of 100 million baht.

Foreign companies with expertise in aircraft maintenance would be invited to form part of the partnership, Somsak said, adding that US companies Pratt and Whitney Co. and Lockheed Co. had already expressed an interest. This would leave government agencies such as the Office of Small and Medium Enterprise Promotion, the Ministry of Finance, and the Industrial Estates Authority of Thailand with a holding of no more than 51 percent.

Somsak expressed confidence that concrete progress would be made on the establishment of the partnership by the end of the year, with initial investment of 800 million baht. At present the government was deciding which airport would be used as a maintenance center, he said, speculating that it would possibly be Nakhon Sawan’s Takhlee Airport.

“The strategies for the development of the aerospace and aviation industries state that within five years Thailand will be a regional aviation hub, and that within 10 years it will be a center for the production of aircraft and components. We will begin by providing services to the Air Force, as at present the Air Force spends around 1.6 billion baht a year on maintenance abroad,” Somsak said. (TNA)

Rising food prices push inflation rate higher

According to figures released from the Ministry of Commerce, rising food prices pushed May’s inflation rates above market consensus to 1.9 percent.

The Consumer Price Index (CPI) rose 0.40 percent in May from the previous month and 1.9 percent year-on-year, against 0.40 percent rise month-on-month in April and 1.6 percent rise year-on-year in April. Analysts had expected a 1.6 percent rise.

Core inflation, which excludes energy and food prices, remained unchanged for the month and stood at 0.10 percent for the year on year, the ministry said.

Thailand’s central bank targets core inflation this year from 0 to 3.5 percent.

The ministry said retail prices for meat, vegetables and rice rose sharply in May mainly because fewer supplies reached the domestic market.

Government agencies project inflation for the whole of 2003 at 1.5-2.0 percent, against 0.7 percent in 2002. (TNA)

Pirate operators cutting into UBC’s profits

Vasili Sgourdos, deputy chief financial officer of UBC, the nation’s largest cable TV operator recently said because the company faces unfair competition from private cable operators in the provinces, it expects the number new subscribers could be as little as 20,000 to 30,000, instead of the anticipated 40,000 to 50,000 new subscribers.

Vasili said, “With the current level of piracy going on in the provincial market, the firm cannot guarantee the company’s profitability during the second half of 2003. We expect to show profits during the first and second quarter, but our subscriber base is still low and our operating costs are rising.”

Regarding the issue of the government allowing advertising on its cable television operations, Vasili said, “We have not received any official notice from the government to allow advertising. We know that Pramote Rathavinij, the deputy director general of the public relations department, is looking into the matter and that the Deputy Prime Minister Wissanu Krea-Ngam will also review the request.” (TNA)

Private sector must spur national economic growth

Deputy Prime Minister Somkid Jatusripitak recently issued a rallying call to the private sector to act as a driver of national growth and development, saying that in the future the private sector would become the nation’s economic leader; while the government would fall back to take a supportive role.

Speaking on the theme of “Thai economic trend in the latter half of the year: the impact of SARS and the US-Iraq war” at an event organized by Thammasat University and the Thai-Chinese Foreign Trade Association, Somkid said that Thailand had gained from the Iraqi war, but then suffered a setback due to Severe Acute Respiratory Syndrome (SARS) but that neither event was likely to have a long-term impact on the country’s economic growth.

“Fortunately Thailand was less impacted by SARS than other countries; while several local economic indicators rose sharply, particularly returns from value added tax (VAT), which grew by 12 percent,” Somkid said.

“Road shows in various countries in the region have shown that other countries are seeing Thailand in an increasingly positive light. The government’s effort to attract foreign investment has strengthened Thailand’s reputation abroad,” said Somkid.

The government sees Thailand eventually standing as a regional economic center alongside China and Japan. Somkid urged Thai companies to focus on meeting international standards in order to prepare for increased liberalization of global trade.

Chakramon Phasukavanich, secretary general of the National Economic and Social Development Board (NESDB), revealed that indices signaled Thailand’s economy would grow by 5-6 percent this year.

Holding up first quarter export growth of 20 percent as an example, Chakramon said prices of Thai agricultural products - including rubber, rice, cassava and prawns - were on the rise. In the production sector, growth was evidenced by the 6-7 percent rise in demand for electricity; while figures show the shipping sector is also booming. (TNA)